IVA and Car finance

Jedi25

We are currently entering our third year of an IVA, which has been going ok, but come September and again in January, both myself and my wife's cars are liable for the final balloon payment.
The problem is, as we are under an IVA, finance is impossible or implausible.
Our plan is with PayPlan, who advised that we may seek finance to either change our cars or re-finance the final payment, but it must not be more than the monthly payments that we currently pay.
We tried a Hyundai dealer who was confident he could help in our situation, but in the end the APR of the finance was more like 40% which made even the basic car too expensive per month.
As I said my car is also coming up in January, so I'm looking for advice from anyone who has been in the same situation as we don't want to take out finance from companies offering finance to credit problem people only to find that PayPlan deems we are breaking our conditions and a whole heap of trouble comes our way!
I should say, we both work full-time and have no way round having to have two cars.

milliemonster

Without being harsh, you must have known at the start of your IVA that the balloon payments would fall due during the life of your IVA, what plans did you put in place then?

Unfortunately this is the problem with this kind of finance that is totally incompatible with an IVA, yes every IVA company will say the same thing payplan have told you, it's fine to get finance to cover the ongoing payments, but no one will lend to you in an IVA.

I'm afraid your options are going to be one of the following:

Hope that the lender who you hold the finance with will allow you to continue paying as you are now instead of paying the balloon payment in one go

Ask a family member to pay it off for you and you pay them back at the rate you have been paying up til now

Hand the cars back when they come due and take a payment break to buy a cheap runaround to get you through to the end of your IVA.

Hand the cars back and take out a lease car with someone like Dunctons/Moneybarn who will lease a car to you in an IVA, ut they require a hefty deposit up front and the interest is generally high.


I'm in an IVA myself but I find it totally bizarre that someone can go into an IVA without addressing the 'knowns' that are going to crop up during the forthcoming 5 years and leaving something like this to chance when as you say, you need your cars to work is just plain daft to be honest.

FiatFan_2

Hi, I was reading through my agreement again last night and noticed that it mentioned we were permitted to gain finance against any known balloon payment on the back end of a finance agreement, fortunately our car finance hasn't got one. This must be one of the discrepancies between IP's as although that clause in in, had our finance agreement had a balloon payment then we wouldn't have been allowed to retain the car for this very reason.

Are you a member or have you got a local credit union near by? If so consider a discussion with them as they may be willing to help. As you have plenty time, if you can get some savings in there then you could borrow against them (save/borrow) at about 13% or if you can't they could lend at about 26% (borrow/save). I know my local credit union would be prepared to lend to an IVA client as I have discussed a hypothetical loan with them should any unforeseen payments arise that I cannot afford. They are willing to lend very short term, days, weeks, months and no early repayment charge although dependant on the loan I think there limit is £500 or £2000 for "first loan" dependant on the type.

Please let us know how you overcome the situation to help others along